Multiple Choice
Both Japan and Canada experienced severe economic slowdowns during the 1990s.Which of the following is true of their fiscal policy responses and the results achieved?
A) Japan applied the Keynesian prescription of spending increases financed by borrowing and the Japanese economy grew rapidly during the 1990s.
B) Canada reduced government spending as a share of the economy and shifted the budget toward a surplus;the Canadian economy grew rapidly during the decade that followed.
C) Both Japan and Canada applied the Keynesian prescription of spending increases financed by borrowing and both achieved rapid growth during the decade that followed .
D) Both Japan and Canada reduced government spending and shifted the budget toward a surplus and the result was a decade of stagnation and high unemployment.
Correct Answer:
Verified
Correct Answer:
Verified
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